The Delhi High Court has initiated an investigation into the ₹2,000 crore hack of WazirX, a popular cryptocurrency exchange in India. This move comes after investor Jaivir Bains raised concerns about accountability and transparency in the management of the breach. Notices have been issued to the Enforcement Directorate and the Financial Intelligence Unit to look into the matter.
The hacking incident occurred in July 2024, resulting in a significant loss of around ₹1,900 crores from WazirX’s multi-signature wallet server. In response to the breach, WazirX decided to merge affected and unaffected user funds, a decision that has sparked criticism from users like Bains. The concern lies in how the losses will be distributed among users and whether this approach is fair to all parties involved.
Justice Sanjeev Narula is overseeing the case, recognizing the complexity of the situation and the importance of transparency. The court has requested a status report from the Deputy Commissioner of Police to keep track of the ongoing investigation, demonstrating a commitment to holding accountable those responsible for the breach.
WazirX operates under the regulatory oversight of the Financial Intelligence Unit, but the current guidelines may not be sufficient to address such security incidents effectively. Bains’ petition revealed that stolen funds were transferred to Singapore, raising challenges for recovery and highlighting the need for stronger oversight of cryptocurrency exchanges.
The implications of this case extend beyond WazirX and could impact the broader cryptocurrency market in India. Investors are closely monitoring the proceedings to see how the court’s findings will impact trust in digital asset trading. The increased scrutiny may prompt other exchanges to enhance their security measures and management practices to protect their users.
As the investigation unfolds, stakeholders are anticipating potential changes in the regulatory framework for cryptocurrency exchanges in India. The outcome of this case could lead to stricter standards and regulations to safeguard investor interests in the future of crypto trading. It remains to be seen how this incident will shape the landscape of cryptocurrency trading and investor protections moving forward.